lunes, 26 de octubre de 2015

In Argentina Elections, Tight Vote Yields Presidential Runoff. The New York Times.

26 octubre, 2015

October 25, 2015. By Simon Romero and Jonathan Gilbert for The New York Times.

BUENOS AIRES — Argentine voters sent the country’s presidential race
into a runoff on Sunday, boosting hopes in the opposition after Mauricio
Macri, the mayor of Buenos Aires, made a surprisingly strong showing
against the candidate endorsed by President Cristina Fernández de
Kirchner, according to partial results released by the electoral
authorities.

Pointing to a remarkably tight race, Daniel Scioli, a former vice
president supported by Mrs. Kirchner, took 35.7 percent of the vote with
84 percent of balloting stations tallied, against 35.3 percent for Mr.
Macri. The votes obtained by Mr. Macri, a former president of one of
Argentina’s most popular soccer clubs who ran to the right of his
rivals, upend a race in which Mr. Scioli was viewed as a strong
front-runner.

The candidates signaled an intense new phase of campaigning ahead of
the runoff election on Nov. 22. Sergio Massa, a former ally of Mrs.
Kirchner’s who moved into the opposition, could find himself in the role
of kingmaker after securing 21 percent of the vote in the partial
count, with analysts questioning whether he will forge an alliance with
Mr. Macri.

“I invite you to conquer our future,” Mr. Macri, 56, said Sunday
night, in a conciliatory speech before the first official results were
released after midnight, as he positioned his campaign to lure more
voters.

With Mrs. Kirchner, 62, constitutionally barred from seeking a third
consecutive term, the leading candidates ran carefully orchestrated
campaigns that seemed to reflect a longing in the electorate for a break
with her divisive governing style. Mrs. Kirchner intensified attacks on
opponents in the news media and business establishment after succeeding
her late husband, Néstor Kirchner, as president in 2007.

“More moderation is expected as the Kirchner era comes to a close,” said
Mariel Fornoni, director of Management and Fit, a leading polling
company. “There’s an enormous desire in society for less polarization.”

Mr. Scioli, 58, a former speedboat racer, sought to appeal to Mrs.
Kirchner’s supporters by contending that he did not plan any abrupt
policy shifts. Lacking her combative rhetorical spirit, he came across
as a safe option for many voters who want continuity for programs that
have increased social welfare spending over the past 12 years.

“I never won a race smashing into a competitor’s boat,” Mr. Scioli
told reporters during the campaign. “To the contrary, I always look to
improve on what’s been achieved.”

Even though Mr. Scioli seemed to fall short of obtaining the support
on Sunday of some die-hard supporters of Mrs. Kirchner, the possibility
of continuity under Mr. Scioli appealed to many voters.

“Scioli is with the poor people,” said María Rosa González, 66, a
maid who voted for him on Sunday. She explained that her late father, a
corn harvester, had been able to claim a state pension under a 2005 law
supported by the Kirchners in which workers who had not paid
contributions could collect retirement benefits. “This government helped
the people. It’s on display.”

Economists here argue over the costs of such policies, with some
saying that Mrs. Kirchner’s successor will have to grapple with
galloping inflation and a yawning budget deficit. But her supporters say
that antipoverty spending was badly needed in the country after a
chaotic economic collapse and political turmoil in 2001 and 2002.

Mr. Macri, a civil engineer by training, said he would introduce
market-oriented changes aiming to loosen currency controls and lure
great investment into Argentina’s economy, standing in contrast to his
rivals.

Mrs. Kirchner still holds considerable sway, emerging as one of
Argentina’s strongest leaders in recent decades. She has recently moved
to enhance her power through a calculated series of moves, potentially
casting her shadow over the management of the economy and foreign policy
well after she is scheduled to leave office in December.

While voting unfolded peacefully around the country, the leading
candidate needed more than 45 percent of the vote, or 40 percent and a
margin larger than 10 points over the nearest rival, to avoid the
runoff. The delay by the authorities in releasing the results, which
were made public about six hours after polls had closed, left much of
the country on tenterhooks.

Throughout the race, many voters and analysts here were struck as
much by the similarities among the leading candidates as their
differences, reflecting strategies of offering a nonthreatening
alternative to Mrs. Kirchner’s commanding presence. Even Mr. Macri, who
began campaigning from another part of the ideological spectrum, sought
to appeal to supporters of Peronism, the ideologically diverse political
grouping that dominates Argentine politics.

Kirchnerismo, the leftist movement named for the Kirchners, came to
overshadow other factions aligned with Peronism, which originated
decades ago during the rule of Juan Domingo Perón. Mindful of the
hazards of opposing Peronist power brokers, the three men adopted
reserved campaign styles, leading some to suggest that a composite
candidate could easily be made of Mr. Scioli, Mr. Macri and Mr. Massa.

“He is an amiable, middle-of-the-road, middle-class, middle-aged and
fairly athletic bloke of Italian extraction who, with a winning smile,
tells us that the country can easily overcome all its many economic and
social problems,” James Neilson wrote in a column in The Buenos Aires
Herald.

A selection of toned-down candidates suited some voters just fine.
“He’s less bellicose, less divisive,” said Nicolás Quadri, 28, an
architect who voted for Mr. Macri, contending the candidate would have
“more logical international policies.”

Eying the possibility of an alliance between Mr. Macri and Mr. Massa,
political analysts were examining how many of Mr. Massa’s supporters
could help swing the vote. Some estimate that about a third of Mr.
Massa’s support came from dissident Peronists who could actually swing
back to Mr. Scioli, potentially handing him a victory.

“That greatly limits Massa’s margin for maneuver,” said Sergio
Berensztein, an Argentine political analyst. Still, he said Mr. Macri
would have already contemplated how to court this 30 percent, pointing
to a statue of Juan Domingo Perón, the founder of Peronism, that Mr.
Macri recently unveiled. “That’s why he inaugurated the statue,” Mr.
Berensztein said.

STRATDOR, October 24, 2015

Summary

Poland
will hold general elections on Oct. 25 in a vote that could bring eight
years of center-right Civic Platform rule to an end. At issue are
Poland's pro-market domestic policies, which have allowed it to grow
even during the eurozone crisis but have led to more inequality. Opinion
polls suggest that the conservative Law and Justice party will win,
although the post-election coalition talks could be fraught with
difficulty. Whether or not the ruling party loses power, Poland's
foreign policy priorities will not change. Warsaw will continue to
maintain close ties with the United States and NATO while supporting
Ukraine, diversifying energy suppliers and pushing for a continued tough
EU stance on Russia.

Analysis

Poland is still very much a nation in transition. This is most evident in its capital and largest city,
Warsaw. The city center, bombed into ruin during World War II, has been
rebuilt as a sort of living museum – a reminder of the country's past.
But surrounding the historic center, tall glass buildings showcase
Poland's new ambition: to become a key Central and Eastern European
business hub. Large infrastructure projects — most notably the massive
stadium where part of the 2012 European football championship was played
— offer a glimpse of Polish modernization fueled by foreign investment
and EU development funds.

Poland's economic growth has been consistent and impressive. It is the only European country that has not stopped growing in spite of the global economic crisis.
In fact, Poland's gross domestic product skyrocketed over the past
decade, and unemployment is at a relatively low 8 percent – better than
it was in the early 2000s. The ruling Civic Platform party has led most
of the business-friendly reforms of the past decade. During its eight
years in power, it introduced free market policies, including low taxes
on corporations and a relatively weak social safety net compared with
its competitors in Western Europe. The government's objective was to
attract foreign investment while keeping debt at a manageable level.

However,
there is a growing sense among some Polish voters that this economic
growth has been unequally distributed. While absolute poverty has
declined steadily over the past two decades in Poland, equality measures
such as the Gini index indicate that earnings inequality has grown.
According to the European Union this disparity is also regional, with
large urban regions growing faster than small towns and rural areas.
Many Poles, especially the young, are under temporary employment
contracts and receive low salaries, meaning they are becoming
increasingly disenchanted with the benefits of EU membership.
Others have chosen to emigrate, as illustrated by the massive
population outflow that followed Poland's accession to the European
Union in 2004.

These
factors have magnified the natural erosion in popularity experienced by
any party that has been in power for eight years, and Civic Platform's
rival, the Law and Justice party, promises to reverse many of the past
decade's policies. The opposition party has campaigned on a platform
that includes canceling a recent rise in the retirement age, introducing
tax breaks for low-income families and implementing higher taxes on
banks and supermarkets, most of which are foreign-owned. Recent opinion
polls put popular support for the Law and Justice party at around 36
percent, more than ten points higher than Civic Platform.

A
government led by the Law and Justice party could, therefore, lead to
greater state intervention in the economy. Banks could be in a
particularly uncomfortable situation under Law and Justice party rule.
Since Switzerland ended its peg to the euro in January, Polish officials have struggled to come up with a solution for
the situation of Polish bank customers who took loans denominated in
Swiss francs. The Law and Justice party has targeted banks to bear most
of the burden of converting deposits denominated in Swiss francs to
Polish zloty, while Civic Platform has been looking for ways to mitigate
the negative impact of the conversion on the financial sector.

Game of Alliances

While
opinion polls predict an electoral victory for Law and Justice, the
party may not be able to form a government alone. This puts it in an
awkward position — the Law and Justice party does not have many options
for a government alliance. A potential ally is Kukiz'15, an
anti-establishment party led by former rock star and social activist
Pawel Kukiz. But though Kukiz'15 performed well in May presidential
elections, its popularity has waned over the last few months.

The
Law and Justice party's lack of strong political allies opens the door
for the centrist Civic Platform to form an alliance against its more
conservative rival. The alliance could include small parties such as the
Polish Peasant Party, also known as the Polish People's Party, which
has been the Civic Platform's junior coalition partner since 2007. It
may also include the liberal Modern Party, founded less than six months
ago. In addition, a variety of other small parties could align with the
Civic Platform, provided they surpass the electoral threshold to enter
the parliament: 5 percent for parties and 8 percent for electoral
alliances.

But
while an agreement between the Civic Platform and smaller parties could
prevent Law and Justice from forming a government, the shaky alliance
would involve parties with very different political agendas, which could
make for a fragile government. Such an anti-Law and Justice bloc would
also clash with Poland's president, Andrzej Duda. Polish presidents
traditionally relinquish their party affiliations upon entering office,
but before his election in May, Duda was a longtime member of the Law
and Justice party. In late September, the president proposed that the
government restore the retirement age to 60 years of age for women and
65 for men versus the current 67, elements of a populist agenda in line
with Law and Justice's electoral platform.

Steady Foreign Policy

But
neither the Law and Justice Party nor the Civic Platform would change
Poland's foreign policy track, which is rooted in the country's enduring geopolitical imperatives
and precarious position between Europe and Russia. Warsaw will continue
to seek close cooperation with the United States and NATO. The current
government has been particularly hawkish when it comes to Russia, and
the next administration will continue pressuring the European Union to
maintain the existing sanctions regime against Moscow. Warsaw will also continue pushing for energy diversification to reduce its dependence on Russia.

The
Civic Platform has been quite ambiguous about Poland's prospects of
joining the eurozone, and a government led by the Law and Justice party
would not put the country any closer to joining the common currency.
More important, Poland will clash with the European Union on issues such
as immigration or integration with the rest of the Continent. Poland
has resisted EU plans to establish a mechanism for the automatic distribution of asylum seekers
across the bloc, and the next administration in Warsaw will continue
this line. Poland is interested in preserving its EU membership but will
remain wary of measures that involve transferring any more sovereignty
to Brussels.

This
opens the door for tactical political alliances in the coming years.
Poland will probably support proposals by the United Kingdom to protect
non-eurozone countries from measures designed by the members of the
currency union. Poland will also continue to cooperate with the other
members of the Visegrad Group (Hungary, the Czech Republic and Slovakia)
as well as with Romania and Bulgaria to defend EU agricultural and
development funds and oppose quotas of migrants, among other issues.

After
the Oct. 25 polls, Warsaw will enter a new political phase dominated by
either a nationalist government or a multiparty alliance that would
struggle to remain in power. This will not produce any meaningful
changes in the country's orientation, but could freeze or even reverse
some aspects of the country's process of economic liberalization and EU
integration. The extent of this change will depend on the final
composition of the government.

Stratfor provides global awareness and guidance to individuals, governments and businesses around the world. We use a unique, intel-based approach to analyze world affairs.

domingo, 18 de octubre de 2015

What comes after the Atlanta deal on the Trans-Pacific Partnership?

The 12-member Trans-Pacific Partnership (TPP) agreement was all but concluded last week after five years of negotiations.
The deal now faces the challenge of ratification in each of the 12
countries, with all their domestic political obstacles — including a
possible election year vote in the US Congress and the Australian
Senate.

In this week's lead Richard Katz reviews the
trip wires facing passage of the legislation through the US Congress.
The time has passed for correcting any flaws in the TPP settlement, he
points out, and Congress will either have to pass this TPP package or
none at all. Although its terms have yet to be publicly announced, the
question for legislators in all countries is whether the pact's benefits
outweigh its flaws.

'Looming
large over the debate in the US Congress is the immense veto power of
assorted well-connected, well-financed special interests. Too many of
those who claim to support “free trade” no longer mean a two-way street
in which the United States helps promote its own prosperity by promoting
that of its partners. Rather, they seek a system in which others open
their markets to favoured American business sectors, but the United
States is not expected to reciprocate'.

Clearly
President Obama wants to steer the TPP through Congress as early as
possible, with the target date being April next year. But there is talk
of delay because of next year's presidential elections, in which Hillary
Clinton, who's done a U-turn against the TPP, is still the likely
Democrat contender. One option
is to try to engineer passage through the 'lame duck' session of US
Congress next December after the election. United States Trade
Representative (USTR) Michael Froman is said to have given credence to
that tactic in the past few days.

Australia's Trade and Investment Minister, Andrew
Robb, stared down the USTR and the US pharmaceutical lobby on
restricting data protections on biologics — medicines made from living
cells and organisms — to five years instead of the 12 that the United
States wanted and that will make it easier to pass the Australian
Senate. It is difficult to justify extending monopoly protections for
intellectual property that would cost Australian consumers and inhibit
further innovation, as most of the evidence suggests. If
Australia was to change its patent laws, copyright and intellectual
property protections more generally, that should be done through
domestic debate and agreement.

In
situations where there is political consensus in most countries on
opening up to trade, but where narrow interests block broader benefits
to an economy, the TPP made some real gains. Australian, New Zealand and
other producers will have better access to Japanese
agricultural markets, beyond that achieved in the bilateral economic
partnership agreement last year. The US sugar market was never in play
but a small import quota has doubled and access increased in other
important areas in manufacturing and services.

While
market access issues were among the most contentious in the
negotiations, the biggest gains will come from the new rules and
standards that promote commerce in the 21st century. Making sure data
flows freely, markets are more contestable and improved transparency are
all worthy goals: we will know more about that achievement when details
of the agreement are made public. If it turns out that the outcome has
been defined largely by business interests at the cost of consumers,
ratification and further opening up to international competition will be
tougher.

The
TPP is not the end goal but should be seen as a step forward to
economic integration, lifting incomes and creating jobs. There are still
many other markets that would benefit from exposure to international
competition, both inside the TPP and beyond it. And the TPP creates some
problems that will need to be addressed.

The
main economic benefit for Vietnam, for example, derives from more
access to the US clothing and textiles market — an important export
market for Vietnam and one where the benefits appear so large as to
swamp any costs associated with signing up to new rules that seem more
suited to advanced economies. But that market access requires materials
and inputs to be sourced from within TPP countries. Not China,
Indonesia, India or any other non-TPP country. This problem affects not
just textiles but all trade that discriminates between trading partners.
Diverting trade away from non-members towards members means that trade
is simply being shifted around instead of new opportunities created.

The calculation for countries like China and Europe left
out of the TPP is not the same as it is for Vietnam. While China and
other developing countries aspire to high environmental standards and
better institutions, with reformers pushing hard for more transparency
and diluting the influence of state-owned enterprises, none of these
issues can be resolved simply by an international agreement mandating
it. They require the hard yards of reform, just as China's 15-year long
march to WTO accession in 2001 shows. The reformers in China can align
some of their domestic reform priorities to the TPP to act as a catalyst
but this will take time.

Both
Asia and TPP countries cannot ignore the established trade and economic
weight of China. There's no major business anywhere in the region,
including Japan, that does not
have to factor China in. With China out of the TPP for the foreseeable
future, the incentive to ramp up Asian economic ties will be more
powerful.

The
ASEAN plus six countries are parties to the negotiation of the Regional
Comprehensive Economic Partnership (RCEP), which has yet to receive the
attention that the TPP has but could still be more important
economically. It builds off ASEAN's agreements with China, Japan, South
Korea, India, Australia and New Zealand, and it accounts for a much greater share of Asia's economic interests than the TPP, incorporating the most dynamic elements in the global economy.

Getting
RCEP right so that it dilutes trade diverted by the TPP and other
agreements and helps India, China, Indonesia and others in Asia advance
their domestic reforms and openness, is now the top priority. And
hopefully East Asian arrangements will be open to US participation
sooner than the TPP is likely to be open to China's.

All
preferential trade and economic arrangements have the potential to
enhance (through making markets more contestable) or damage (through
redistributing business to higher-cost preferred sources of supply) the
world economy. The TPP is no different and includes positive and
negative economic features. It's the balance of benefits and costs that
count and that depends on the detail. The redistribution of business is
what buys political favours, not only within the participating
countries, but also in international political dealings. They are
agreements that affect who's left out as well as who is in the ring.

But
what we already know about the TPP is that this is more than anything
else a very big deal for the United States and Japan — as Robert Manning says,
it serves as a surrogate bilateral free trade deal that shifts the
partnership to a new level. We also know that if the deal were to fail
Congressional passage or fall over for other reasons, that it would be a
major disaster for US alliance relations with Japan and in Asia and the
Pacific more broadly.

Shiro Armstrong and Peter DrysdaleEditors, East Asia Forum

Crawford School of Public Policy | College of Asia and the Pacific | Australian National UniversityCanberra ACT Australia 020019 October 2015